Alexander v. Fidelity Trust Co.

• Court: U.S. Court of Appeals — Third Circuit
• Citation: Alexander v. Fidelity Trust Co., 249 F. 1 (3rd Cir. 1917)
• Decision Date: 24 November 1917
• Docket Number: 2277-2280.
• Parties: ALEXANDER et al. v. FIDELITY TRUST CO. (three cases). FIDELITY TRUST CO. v. ALEXANDER et al.

249 F. 1

ALEXANDER et al. v. FIDELITY TRUST CO. (three cases).

FIDELITY TRUST CO. v. ALEXANDER et al.

Nos. 2277-2280.

United States Court of Appeals, Third Circuit.

November 24, 1917

On Rehearing, March 27, 1918.

On Petition for Reargument. [Copyrighted Material Omitted]

M Hampton Todd, of Philadelphia, Pa., for appellants.

H Gordon McCouch and Harold B. Beitler, both of Philadelphia, Pa., for appellee.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

McPHERSON Circuit Judge.

Federal jurisdiction of this action depends upon diversity of citizenship. The bill was brought by Archibald A. Alexander, Mary C. Alexander, and John S. Alexander against the Fidelity Trust Company as executor of their father, John Alexander, to compel an account of a certain trust. The fundamental averments of the bill are that John Alexander had been a trustee for the plaintiffs, that he had not accounted for the fund, but had left it as an indistinguishable part of his estate, and that his executor was in possession of assets sufficient to respond to the plaintiffs' demand. In full detail the facts appear in the following unreported opinion of Judge Thompson, delivered August 26, 1915:

'The plaintiffs filed a bill for an accounting by the Fidelity Trust Company, as executor and trustee under the will of John Alexander, deceased, of moneys received by the decedent, John Alexander, as trustee for the plaintiffs under the will of George Jones, deceased. The Fidelity Trust Company alone filed an answer and put in a defense.

'George Jones, a resident of Wilmington, Del., died in August, 1867. John Alexander married George Jones' daughter, Mary Jane, who died prior to the time of George Jones' death, leaving five children, Mary C., John S., Archibald A., still living, and James G. and Annie G. Alexander, both deceased.

'The second item of George Jones' will is as follows:

''To my Son in Law John Alexander and his heirs and assigns I give and devise all my farm land in Kent County in this State, in Trust for the Equal use, benefit and behoof of his children by my daughter Mary Jane (now deceased) with authority to retain and manage it for their respective Equal benefit, or at his option at any time to convey and assign the same to them and their heirs as Tenants in Common free and discharged of any trust or, with the assent to be expressed in writing, of such of the said children as may at the time of the Exercise of such option, have attained twenty-one years of age, to sell and dispose of the said lands and tenements, at public or private sale for the best price to be obtained therefor, and thereupon to make a good and sufficient deed or deeds in fee simple therefor to the purchaser or purchasers thereof, free from all Trust and any liability of the purchaser or purchasers to see to or account for the proper application of the purchase money by the said John Alexander or his heirs; the said purchase money thereupon to be still held in Trust by him or them for my said Grandchildren, or at his discretion, to be paid over to them respectively discharged of any Trust, at such times and manner as he shall deem most beneficial to them respectively.'

'Letters of administration were granted to John S. Alexander upon the estate of James G. Alexander, December 22, 1868, and upon the estate of Annie G. Alexander, November 4, 1899.

'After the death of George Jones, the decedent, John Alexander, remarried and had one son, Lucien H. On March 27, 1868, John Alexander, together with Mary C., John S., and Annie G., all of whom had then reached the age of twenty-one years, sold the real estate in Kent county, known as Linden Farm, to Henrietta Ord Underwood, for the sum of $13,000. The purchase price was paid to John Alexander as follows: $10,000 by the assignment to him of a bond and mortgage of John P. McLear and wife to Henrietta Ord Underwood to secure the payment of the sum of $10,000 and the remaining $3,000 by a purchase-money mortgage upon Linden Farm in the sum of $3,000. John Alexander sold the McLear mortgage March 18, 1872, for $10,000, together with the interest due thereon, the proceeds in all exceeding $12,000. The decedent, on March 28, 1873, charged himself as trustee, and credited the accounts of Archibald and Mary, respectively, with the sum of $4,026.91 each. It is conceded that settlement in the sum of $4,026.91 in full for his share of the proceeds of the McLear mortgage under the George Jones trust was made at that time by the decedent with his son John S. Alexander. The Underwood mortgage for $3,000 was sued out in proceedings brought in 1884,

and the land was purchased at the sheriff's sale by John Alexander in his own right for the sum of $6,500 and a deed made to him by the sheriff. The title to the property remained in John Alexander at the time of his death. John Alexander continued to recognize the George Jones trust and his liability to account under it down to the time of his death. This is shown by entries in his book and by declarations in wills made in 1891 and 1893. In a will executed June 26, 1891, by item 4 he directed his executors (in case he did not do the same thing in his lifetime) to transfer to the Fidelity Insurance Trust & Safe Deposit Company, in trust for his daughter Mary, certain securities, and, in case he did not do the same thing in his lifetime, to transfer to his son Archibald certain securities and the proceeds of a certain life insurance policy, with the following clause applying to both bequests: 'Which transfers include payment in full to my daughter Mary C. and my son Archibald A. of their interest in bequest of their Grandfather.'

'In an entry in his ledger under the date of January 13, 1887, he had enumerated the same securities referred to in the will of 1891, and directed that his executors transfer them to Mary and Archibald, respectively, at his death in case he had not done so in his lifetime.

'The testator further directed that reference be made to the memoranda accounts of his children to ascertain whether the transfers referred to had been made in his lifetime. It is apparent that his intention in item 4 of the will of 1891 was to designate the funds held by him in trust, and, as far as Mary and Archibald were concerned, to carry out the directions of George Jones under the last clause of item second of his will, viz.: 'The said purchase money thereupon to be still held in trust by him (John Alexander) or them for my said grandchildren, or, at his discretion, to be paid over to them respectively discharged of any trust, at such times and manner as he shall deem most beneficial to them respectively.'

'In a subsequent will dated March 15, 1893, which was duly probated, in the fourth paragraph he again recognized his liability to account for the George Jones trust by directing his executors, in case he had not done the same thing in his lifetime, to pay over to the Fidelity Insurance Trust & Safe Deposit Company for his daughter Mary C. the sum of $15,000, to be held in trust with power of appointment in her by will; and further directed his executors, in case he had not done the same thing in his lifetime, to transfer to his son Archibald certain stock, certain interest in joint indebtedness declared against his sons Archibald and John S., and the proceeds of a certain life insurance policy, and declared 'these payments and transfers include payment in full to my daughter Mary C. and my son Archibald A. of their interest in bequest of their grandfather Jones.'

'He further provided in item 4: 'As my devoted son John S. has years ago received from me his share of his grandfather Jones' estate, and has also been released from certain large cash liabilities to me, I bequeath in this item of my will only to my children Mary C., Archibald A., and Lucien H., and I have, according to my best judgment, done the strictest equity to all.'

'The existence of the George Jones trust at the time of John Alexander's death, and his recognition of his liability to account to Mary and Archibald, is therefore clearly established by the testator's declaration.

'During the lifetime of John Alexander, he had advanced and loaned large sums of money to his sons, which appear charged against them on his books. In the will of 1893, item 8, he states that the advances to his two sons John S. and Archibald A. amount to $115,100, 'a portion of which indebtedness to the extent of ($6,000) Six thousand dollars thereof I have by Section Four of my Will bequeathed to my son Archibald A., which leaves at this date as forming part of my residuary estate a net balance of indebtedness due by my said two sons of One hundred and nine thousand one hundred dollars ($109,100), whereby my said two sons have jointly received possibly more than their just share of my residuary estate.' The amount of the indebtedness was by a codicil declared to be $121,800.

'The accounts with Mary upon her father's books do not indicate any intention on his part to charge against her share in the George Jones trust any individual advances made to her. The individual accounts of Archibald upon his father's books, as far as appears, show loans and advances made by his father in his individual capacity, and do not indicate any intention to charge them against the fund held as trustee. The declarations in the wills of 1891 and 1893 indicate that up to that time no settlement of the Jones trust estate had been made, but that John Alexander intended by his bequest, in item 4, to charge against the shares of Mary and Archibald under the Jones trust in settlement thereof the money and securities therein enumerated.

'It is evident from the books of the decedent and conceded by all parties in interest

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